Plus SMS explains UK listing

Technology company Plus SMS Holdings is listing its UK subsidiary to focus the business on key markets rather than raise funds, the company says.

In early January, founder Garry Donoghue said Plus SMS Holdings had $6 million in the bank - enough to see it through its start-up phase.

Chairman Jim Bracknell says this position has not changed.

"It's really about just the restructure of the company and getting it positioned in the right place."

This restructuring is eurocentric by necessity, he says.

"The initial revenue that we get out of Plus SMS, and largely going forward a big piece of our revenue, is going to be European-based."

Plus SMS plans to enable companies to run global text message campaigns and competitions using single numbers.

This will involve routing messages over existing telecommunications infrastructure and using the settlement processes that are in place for payment.

Plus SMS Holdings joined the NZX Alternative Market last July via a back-door listing using the shell of failed retailer RetailX.

The listing was a holding shell for an operational company, Plus SMS, which was actually set up in the UK on the Isle of Man in November 2004.

The listing on the London Stock Exchange's AIM market will return cash to Plus SMS Holdings shareholders in return for a 15 per cent stake in the physical company.

New Zealand shareholders have nothing to fear from the UK listing which will increase the value of their asset and improve liquidity, Bracknell says.

The reaction from shareholders to the proposed listing has been positive, he adds.

"If you look at what happened to the share price after we announced the go-ahead with the AIM listing, the market gave us a vote of confidence because the shares went up from 68 cents to 76 [cents]."

The company has appointed London-based broker Collins Stewart to act as nominated adviser and broker.

The exact timing of the listing is dependent upon completion of financial and legal due diligence, as well as market conditions.

Earlier this month Plus SMS Holdings posted financial results showing a loss of $1.3 million for the 10 months to September.

The company was focused not only on ensuring sufficient operational funds, Bracknell said at the time, but also on getting the contracts with network operators, regulators and other parties needed to route SMS messages worldwide using a single short number.

"Plus SMS now has contracts in place which represent over 70 per cent of the number ranges that the company is seeking to acquire," he said.

In December Plus SMS signed a deal giving international television and sports rights management company ISTV the right to market various international short codes including "sport", "rugby" and "football".

In January Plus SMS signed a letter of intent with Citic Telecom 1616 giving it access to the Chinese organisation's platform and client base.